If the bankrupt crypto exchange FTX returns money using stablecoins, the US Securities and Exchange Commission may contest the reimbursements.

SEC attorneys filed an Aug. 30 petition with the United States Bankruptcy Court in Delaware that although stablecoin creditor repayments may not be unlawful, they retain the right to oppose US-dollar pegged crypto asset repayments.

After the exchange collapsed in November 2022, FTX tried many ways to compensate creditors, including a now-binned reboot proposal.

Many creditors have requested in-kind payments, but FTX's latest liquidation plan would pay out claims in cash or stablecoins based on asset valuations in US dollars at the time of bankruptcy.

“The SEC is not opining as to the legality, under federal securities laws, of the transactions outlined in the Plan and reserves its rights to challenge crypto asset transactions,” noted the regulator.

The SEC also observed that the repayment plan had not yet selected a “distribution agent” to distribute cash or stablecoins to creditors.

Crypto experts like Galaxy Digital's head of research Alex Thorn and Coinbase chief legal officer Paul Grewal criticized the SEC for “overreaching” and threatening FTX creditors.

Thorn wrote to X on Sept. 1 that the SEC was again retaining the ability to classify dollar-backed stablecoins as “crypto asset securities” after abandoning its action against Binance USD (BUSD) maker Paxos in July.